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July 17, 2025
Is Tech the Best Lever To Drive Personalization and Relevance in Loyalty?
Dunnhumby’s “How To Keep Hold Of Your Customers” study was the latest to argue that discounts and other traditional approaches are no longer enough to engender loyalty as consumers seek out relevance and recognition.
In the foreword to the study, Ben Snowman — global head of loyalty and personalization, Dunnhumby — noted that in the U.K., four-fifths of shoppers say they’re a member of multiple grocery loyalty programs, but only half say that loyalty cards have an impact on where they choose to shop. A similar number believe that loyalty programs benefit retailers more than consumers.
“Shoppers expect more: more personalized experiences, more value, more recognition,” said Snowman. “Technology is reshaping what’s possible — and what’s expected. And despite a growing need to stand out, loyalty programs instead risk becoming ever-more homogenized; the same core product, wrapped up in different packaging.”
Dunnhumby’s study posed three questions every retailer should be asking:
- As AI and automation create new opportunities around loyalty and personalization, how will we continue to differentiate?
- With consumer expectations around loyalty continuing to evolve, how can we ensure that our business continues to deliver?
- Are we designing our loyalty program based on what our customers value — or are we just following everyone else?
McKinsey Suggests AI-Driven Promos Are Part of the Future of Retail Loyalty
Meanwhile, McKinsey’s “Unlocking the next frontier of personalized marketing” study encouraged retailers to boost their technology stack to embrace AI-driven targeted promotions and tap genAI to scale relevant messages down to tone, imagery, and copy.
McKinsey authors wrote, “Brands and retailers can better connect with customers by using language that speaks to them and by providing communications that resonate and give consumers a reason to engage.”
McKinsey further believes AI has the potential to improve “mass promotions,” or using data to tailor discounts based on an individual’s shopping preferences or their affinity for different types of offers.
The study authors wrote, “With a more granular approach to customer segmentation, retailers can craft promotions that target specific customer life cycle stages (such as new-customer acquisition, customer retention, repeat purchase, or risk of churn) or specific business objectives (such as promoting a particular brand or category or encouraging cross-selling).”
Attentive Data Suggests Customers Want Personalized Messaging
Attentive’s “2025 Consumer Trends Report: The State of Personalized Marketing” included a survey of 3,3000 consumers across the U.S., U.K., and Australia taken in January that found:
- 71% want brands to learn from their shopping habits over time.
- 77% are likely to purchase from a brand when they get relevant product recommendations.
- 90% want more personalized communications than they’re already getting.
Attentive said manual segmentation and rule-based workflows have limited personalization efforts. However, advances in AI personalization and the arrival of rich communication services (RCS) — which bring interactive, app-like features including browsing and purchasing to text messaging — promise to make mobile messaging “the new frontier for personalized commerce.”
Keri McGhee, CMO at Attentive, said in a press release, “The data is clear and consumers want more relevant, personalized experiences, and brands that deliver will see the results.”
Discussion Questions
Has the technology matured enough for retailers to bring more relevance and personalization to loyalty programs?
What do you think of the promise of AI, rich communication services (RCS) and other newer technologies to elevate personalized offers and communications?
Poll
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Brian Delp
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Verlin Youd
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Tech, tech, tech. No, no, no. Tech facilitates. It helps. It is not the main meal. Real loyalty is created by getting the fundamentals of retail right. Look at Abercrombie & Fitch. Was its recovery and turnaround driven by its loyalty program? Was it driven by using AI agents? No, it was not. It was driven by a leadership team which obsessed over buttons on garments, which shortened supply chains so they could chase trends, which reconfigured stores – and which did all this with reference to the customer. Tech has a role to play in all of this, and it can certainly help with things like personalization, but to create real loyalty brands and retailers need to get the proposition right.
And that personalization isn’t an email that reads, Dear GEORGANNE BENDER, the last time you bought…”
I am making a good salary from home $1400-$2400/week , which is amazing, under a year back I was jobless in a horrible economy. I thank God every day I was blessed with these instructions and now it’s my duty to pay it forward and share it with Everyone,
.
Here is what I do…… https://rb.gy/y4j09o
Exactly!
Tech won’t help you win new customers, but rather delight, retain, and ideally upsell existing customers, whether through loyalty programs, promotions, differential pricing (in the customers favor), or an improved in-store experience. But you need to convince the new customer to try your brand first, which is where exceptional merchandising, competitive pricing, and catchy marketing is most important.
I’d argue that traditional approaches are still fundamental to building loyalty, yet many retailers have abandoned them. At the core, customer service and clienteling have been stripped away in the name of operational efficiency. Digital tools should enhance, not replace, the basics of good retail.
Retailers are attempting to address a relevance problem through technology. Technology should enable and amplify, not replace, human insight. Sephora utilizes sophisticated personalization, backed by exceptional product knowledge and service. Costco, on the other hand, is a relative technology minimalist, yet it creates fanatical loyalty through consistent value and experience. Technology is powerful when it enables solid retail fundamentals and not by compensating for their absence.
Is tech required to deliver more personalized, relevant, and impactful value to engender shopper loyalty – yes. However, all the tech in the world won’t matter if you don’t have the right product in the right place for the right price at the right time, accompanied by the customer experience (service) expected.
When are we going to learn that tech is a tool and not the second coming that will somehow save retail? People respond to other people, particularly to how they are treated. Discounts and personalized emails are nice, but their job is to help the associates on the front line do theirs.
Technology is a tool that can do in much less time, that which a marketer or merchant could already do with out technology. But, it follows that technology will be a great help in exciting that which marketers and merchants have already conceived as the tactics it would like to implement, the business rules. Then, technology can take on those tasks at scale. One does not work effectively without the other.
The problem with how companies (including retail) approach tech today is that too many leaders see it as a solution rather than a tool.
Now hear this: if your business basics are a losing proposition, tech will not solve the problem. If Mr. Retailer, you can target me with what I am precisely looking for, it may help. Amazon does it every day with “We found something we think you will like,” and they have never.
In today’s world, convenience often trumps loyalty.
A bad idea implemented by technology is a bad idea amplified.
Tech s the enabler and not the soution to great customer service. It is about having the products available at the right time in the right channel to the customer and having all the information available. The best toolbox in the world doesn’t help if you don’t have the parts. AI will drive efficiencies and enable people to work with better information, but it doesn’t make you fundamentally a better retailer
Tech is the great efficiency and sorting tool. It’s a great platform to ensure the masses of customers receive attention in marketing and offers. And its gotten to where small businesses can operate loyalty programs like the bigs.
But real customer loyalty comes from delivering on promises, from team members who recognize customer faces, who help them find things, who create value in the shopping experience.
We’ll very quickly see the rise of personalized agentic commerce. As OpenAI recently announced, they are working out an affiliate program with Shopify to create personalized shopping agents, similar to Google’s AI Mode in search.
This environment will dramatically shift consumer behavior and deprioritize the “value” of a retailer in general. There’s no search fatigue if a shopper bot can crawl ten million websites and find the best price, reviews, and capabilities.
Similarly, for retailers (like Target et al) who have a strong community and app engaged audience, the expectation for a “chat like” interface with personalization is already starting to rise.